are scrambling to find a banker who will finance a 25% duty when the goods were in the water before i even knew the tariffs would be imposed. a lot of these little guys are being hit with tariffs they did not expect, could not do anything about, and you don't have a way to finance. that will start to kick in too. you will start to see it in the fall. in houston, you have a lot of inventory. in your steel service centers. and as that inventory bleeds out, you will see the effect. i will give james first access. our next speaker will return. i want to thank you very much. >> sure, ok. [applause] minutes.for 10 james, if you want to ask your

question, that is fine. >> let's keep going. we have with us scott paul, president of the alliance for american manufacturing. theill tell you about organization, but is basically an alliance between steel companies and the steelworkers union. about theg to talk anti-dumping provisions and duties. he will talk about how the process actually works and what those terms mean. he will also talk about the recent steel actions, the 232 action. he comes at it from a different perspective and will tell you about that.

it at 1150 right now, he will talk for 30th minutes and then we go to q&a. >> thank you. for this opportunity and to all of you for spending the day on trade policy. as chris indicated, my primary task is to talk about the trade enforcement mechanisms that were available under the law, how they are applied and why. and then, to get into details of the recent applications. i spent 12 years on capitol hill working for industrial state members of congress. i have an academic background in economic and national security. past 12 years, have had the alliance for american manufacturing, which is pretty unique.

we are a labor business partnership, which you do not find very often in this town. -- and we come together to work on issues of trade enforcement. in many ways, trade enforcement is the forgotten child of american trade policy. it is actually the oldest and most consistently applied formulation. the first proponent of tariffs in the united states was none other than alexander hamilton, who is been in the news for other reasons. but tariffs are as old as our country. they were the primary mechanism of trade policy that we have had for almost all of our nations history. you have seen an emphasis on free trade agreements, certainly in the four administrations prior to trump. both obama, clinton, and both bush administrations emphasized

trade expansion and free-trade. but trade enforcement has been sprinkled within each administration. reagan,ou go back to you would hear something along the lines of the rhetoric you here today. if you want to sell any cars, you will have to make them here that is what president reagan said. we will put ars, 100% tariff on semi conductors here. you make them it is something the latest generation of political figures and journalists are struggling to find context with, because it has been so out of fashion for such a long time. and the type of trade enforcement that does occur occurs under the radar. there are a couple of mechanisms that are available in u.s. law right now. what is called anti-dumping. those are tariffs that can be

applied if a domestic industry is facing imports coming in that are both harming it in some way and are also coming in and what is not a fair price. ,hat they are being sold perhaps at a lower price there being sold in the home market or what would otherwise be made available. there are countervailing duty tariffs. those are available in the event and other industry is subsidized overseas. a popular case that you can think of would be airbus, perhaps, receiving subsidies from the european union. state owned enterprises in china receiving subsidies from their government as well. actions, a safeguard and i know hillman touched on those. you have seen them in this administration on washing machines, solar panels, you have

seen them in past administrations on issues like steel and some others as well. usedafeguard actions are if a wave of imports is coming in. a volume of imports that is so large it is impacting the economic health of a domestic industry. and you do not necessarily have to establish the dumping, the countervailing, the subsidies, or some of the other facts that require these other cases. there is also dispute resolution that is available at the wto. which is generally lengthy, limited in scope, but we have brought a number of cases against other governments at the wto. it is also been a defendant in a number of cases as well. very quickly, how does this happen? say it is the,

steel industry, cotton, ball bearings, honey producers, garlic, furniture makers, there are a lot of industries that put together evidence that would show they have been harmed in some way by imports. they can initiate a case. in some circumstances, the government can initiate a case. you have seen the trump administration and do that several times within our domestic loss -- laws. or you can take a case to the wto. in that instance, a particular company or group of companies cannot take a case to the wto. it has to persuade its government to take the case for them. if an industry is pursuing that route, it is entirely dependent on the administration that is in office in that time to move forward with the case on its behalf. here is how the anti-dumping

case works. if foreign exporters sell to the u.s. at less than fair value, and i will use ball bearings as an example. say a ball bearings are coming in from taiwan that are being sold at essentially less than the cost of production. the ball bearing industry might consider putting together a case. it will have a good chance of succeeding if the following is also true. sales cause the material injury to the united states. that can be measured in terms of loss of market share, profits, layoffs, and other types of criteria. then, the u.s. will impose anti-dumping duties. , again, ifsidies foreign exports to the u.s. are subsidized, and we can establish exports are those causing injury to the domestic

industry, then the united states can impose these types of countervailing duties. often times, they are combined into one case. anti-dumping both duties and countervailing duties administered at the same time. so how does this work? the commerce department investigates whether or not the dumping or subsidies have occurred. and they do this by surveying the domestic industry, the ford producers, gathering all of that data together and making the best available assessment. it is not subjective. it is based on objective criteria. , because these cases are quite expensive and lengthy for an industry to initiate, it is like putting together a legal is that a u.s. industry is not likely to bring forward a case it does not think it will.

-- win. and it will have its own economic analysis prepared. but it has to be confirmed by the commerce department. if the commerce department says that there have been subsidies or jennifer hillman was a member of that at one point in time. the appointed body will determine whether or not material injury and it will -- there will be a hearing process and they will hear from the local industries and the consuming industries locally. they will hear from the importers as well. and other parties. so then there can be additional duties or tariffs placed on the imports. they are equal to -- they basically make up the margin of difference between what the price should be and what it is

being sold for in the united states. these are not paid by consumers. they are actually paid by the importers themselves to bring the process in. what essentially this does is raises the domestic cost of the item. and so either prices go up that increases again the revenues for the domestic producers and puts people back to work or they get greater market share because imports are reduced as well. these types of duties are likely to remain in place for at least five years and then they are reviewed periodically to see if the circumstances still warrant them. so how common are these? they are actually relatively common. there were 84 of these cases that were filed at the commerce department last year. there were 50 anti-dumping duties currently in place on a

wide variety of products ranging rom furniture, steel, to solar panels, to honey, garlic, raspberries, some types of fish. there is a lengthy list of all of these. there are 47 countries that are currently covered by these duties. it is not just china. you see actually a lot of dumping and subsidys occurring in other economies around the world. when we talked about 10% or 25% tariffs people perk up and say wow, that seeps like a lot. and it does until you consider some of the duties put in place by the commerce department and the international trade commission. there are currently 407% tariffs on a certain type of electrical steel from china. 200-something percent on all of these prucks and believe it or not all of these tariffs were put in place by the obama

administration. they predate the trump administration. you saw duties to specific products being apply fld the very of 200% to 400% on specific products. again, the idea of a 25% tariff sounding quite shocking to people, it is. but for folks inside the trade community, this is actually a number that seems quite -- that seems quite reasonable when you look at some of these orders that have been made here. so let's look at some of the other types of trade remedies available to the domestic industry or through administrative action by an administration like the trump administration. there are safeguard actions available which i explained and you have seen duties put on washing machines and solar panels under what is called the

section 201 case. again, this industry has brought this case -- it has been adjudicated within the commerce department and the international trade commission and those tariffs established on washing machines and solar panels. there is the national security provision available. section 232. we're going to bookmark that. i'm going to get more into that later in the conversation. there is a specific intellectual property. under section 337. there is broader authority that the u.s. trade representative has to put forward a case and a section 301 case is what you have seen on china right now related to intellectual property, theft, other sorts of anti-competitive practices. these typors cases are actually something that industries often encourage the government to pursue for the following

reasons. they can be broader in scope than just a specific duty on a specific type of classification of steel for instance. they can handle more serious concerns like national security because of anti-dumping and duty cases. these cases are move through the process faster than an anti-dumping duty case. not all types of these cases require proof of injury. like you have to show that the industry has been harmed under these cases. that is true under section 232 cases in particular and i will add another element to that. while domestic industry has to do a lot of preparation for a case like this, it doesn't necessarily have to pay for it. again, it can be pretty small sized firm that is facing a lot of imports coming in and it is a

lot to spend a couple million dollars to try to take a trade case. this is a role of government that has been outlined since the very early days of our constitution. jennifer talked about the options that are available at the world trade organization. government-to-government cases under president obama. he filed 25 cases at the w.t.o. 15 against china. we won 14 cases. six were resolved without a panel ruling. that meant the parties got together and settled the dispute before the w.t.o. action and five remained pending at the end of the administration. these cases can drag on for a number of years. the e.u.-u.s. dispute related to boeing and airbus is something that has been going on for almost as long as "the simpsons" has on television. a very, very long time.

i wanted to dive into the section 232 action a little bit and explain the rationale for this. the root cause of the trump administration proposing these tariffs on steel and aluminum was a massive imbalance in the global market. billion metric tons of world steel making capacity ich is up dramatically since 2000. there is about 700 million metric tons of excess fuel capacity in the world, which by the way, the united states doesn't even make 100 million metric tons a year. there are more steel mills around the world than we make domesticically in one year of steel by a factor of seven. china has contributed 7 of this excess capacity. part of that is because most of the chinese steel industry is

owned by the government. it doesn't respond to market signals. it doesn't have the same cost of capital as other steel makers around the world do including in the united states, japan, korea, elsewhere. they can operate without respect to market conditions. if consumption is going down this china, what would happen in a market-based economy is that steel production would go down. that doesn't happen. china keeps producing the steel. anybody who knows economics starting with a lemonade stand knows if you have an excess supply of lemonade stands in a neighborhood, say there is 15 of them, there is not going to be a lot of money to go around and not all of those stands are going to stay in business no matter how good the lemonade is. if you have the right amount of lemonade produces and there is a balance balance between supply and demand everybody is going to be better off. you don't have that in steel.

that does is it depresses the price of steel so low that it is being sold for less than it costs to make that steel. in in a lot of different places in the world, including in the united states. this is especially true in the united states because we're the largest importer of steel in the world. our imports of steel are four times our exports. and i will argue that our ability to make steel is important for our national security. think of any weapon or platform that we have that supplies our national defense and there is a whole lot of steel in it. you think battleships, aircraft carriers, airplanes, tanks, armored personnel carriers, all types of missiles and weapons. each of those applications has a considerable amount of steel or aluminum in it. another factor. at a time that our economy was

doing very well a couple of years ago, the streel steel industry in the united states was in a recession. 19,000 steel workers got laid off because this surge of imported steel coming in from china. steel consumers three years ago were paying recession level prices for steel. it was like having a 100% off sale on steel that lasted for about three years. in the united states, the number of these steel makers closed their operations and even though there has been a dialogue going on for a long time about this excess capacity what happened to do about it, nothing has actually been done. nothing has been done about it. the w.t.o. is wholly incapable of managing this process. there has been a dialogue taking place outside the w. tombings but it has taken all of the parties to that dialogue a couple of years to agree on what

the definition of overcapacity is. there is no mechanism to save a country if you're producing too much steel, there is a way that we can close off our markets. nothing exists right now other than our domestic flaws. while the steel industry filed a number of those cases that i mentioned, they have to file very specific cases. when you have a volume of steel that much, it overwhelms and the floods system. those anti-dumping cases were somewhat helpful in a way that a battlefield bandage is somewhat helpful on what could be a potentially mortal wound. eventually you have to get a higher level of care. that's what the section 232 tariffsst are all about. so the -- the national security rationale for this, i explained the application. i've been around to a lot of these mills.

there is one steel mill left that makes armor plate for our entire military and almost all of its revenues are from the commercial space. if the commercial market conditions are not good for that mill, it is not going to be making anything including armor plate for our military. steel s one electrical used for our energy grid nationwide. again, for this particular mill, most of its sales are if the commercial markets. if the commercial market is not healthy, it is not going to be able to make steel for the military either. it is going to go under. we have no steel meals in the united states that make steel exclusively for the military. it is a small, but important part of their portfolio but they can't make that steel if they are not open. in order to stay open, they have to have a healthy and functioning global steel market.

that is the -- that is the rationale behind the national security for this. and so some people will say and i'm sure you have heard this criticism. well, you know, there is not a lot of, you know, the military market for steel is only 3% of the steel market. this sounds like an odd application. it is not when you widen the lens and consider the market conditions that all of these producers have to face. jennifer talked about article 21. under the w.t.o. in the gap. i will say this. in sweden, in 19755, the swedish government -- 1975, the swedish government said we're going to invoke this and put quotas on imported footwear because we view that as a threat to our national security. footwear. we need to properly attire our troops if we go into any kind of

conflict. i'm just going to submit if shoes are vital to national security, steel certainly is. it is the core material in every defense application that we have. since this is self-judging, that is that that each country makes its own determination, you can make -- there are few materials that are more military sensitive than steel or aluminum are. for those of you who might think well, trump just wanted to do tariffs to placate his base because he has to throw them a bone. especially when times are tough or the process -- he signaled that he was going to do this for a very long time. this is a campaign speech he gave in pennsylvania more than two years ago. it holds up pretty well. he said these words and it is ailable in transcripts or in video form, even on c-span. so more than two years, you have known that he has considered something like this.

i'm just going to walk very quickly through the timeline of this. they started an investigation into steel imports in april of last year. initially the president said he was going to get this done very rapidly. that changed. that changed for a variety of reasons. the politics changed. there was a focus on tax cuts and it was probably frankly a little more complicated than they expected it would be. and so a lot of time went by and what happened during that time period is you saw a whole lot of steel imports coming into the united states to try to beat the tariffs. this drove up imports by somewhere between 15% and 20% last year. it actually caused some layoffs in steel meals. while trump said he was trying to help steel mills, steel mills last year were actually laying some folks off while they were waiting for this to happen. in january, the commerce secretary sent a report to the

white house. i know there has been a lot of coverage about trump saying bring me tariffs and find a reason to do this. this is the commerce department report right here. long. 50-175 pages exceptional amount of data on why this kind of relief is necessary and it made three different recommendations to the president on an approach. all of which involved tariffs or quotas. and the president did select i think the broadest application of tariffs but the idea that this was kind of randomized is easy to believe unless you have been following it closely. in that case, there was a very detailed process that went into place before these tariffs were actually applied. they have been in effect now on

steel and aluminum since march and there have been some exceptions made and you may be aware, some countries have been excluded from this. they made alternate arrangements. korea said we'll put a quota on our steel. there is only a certain volume they can bring in from the united states. argentina. australia. we don't have a lot of steel trade with australia. it is likely if there was an e.u. deal and a nafta deal that there will be alternative arrangements made for mexico, canada and the european union as well. consumers, first, the imported steel in the united states could file for exemption. there have been more than 16,000 of those that have been posted online. there have been 511 product exclusion requests granted.

404 product requests have been denied on the following basis. that that steel is made in the united states somewhere and it is available, the commerce department has indicated it is going to deny the request for steel consumers. just because a steel consumer has always got an certain type of steel from japan or china or somewhere else and it is available in the united states, doesn't mean that they are going to get an exception for that steel coming from another country anymore. the relief is working for the steel industry. there are blast furnaces that have opened up in illinois. the president was there last week. i've been there many times. there is a couple hundred workers that have gone back to work. no one thought it would open back up. 1,000 jobs in ohio. republic steel. century aluminum announced a new investment in new jobs in kentucky. in houston, texas, ohio.

announced 1,000 new jobs. new core is opening two new steel meals. there is foreign investment coming into the united states for steel and aluminum now. here is a swiss or german firm opening a mill. the tariffs are having its intended effect for the producers. now i briefly went over these exemptions and exclusions. you can peruse them further. the one thing that i will say, there have been a lot of anecdotes written about firms suffering pain from the steel tariffs. there is no doubt that a firm that has been dependent on steel imports for a long time is going to face an adjustment and there will be some pain. but when you look at the data and this is the important thing. when you look at the data, it shows that manufacturing jobs

are growing. manufacturing jobs eated 37,000 jobs in july -- add 37,000 jobs in july. steel industries added a tremendous number of jobs last month. while there may be some adjustment that makes place and firms open and close all the time and lay off workers i don't want to underscore how difficult that is. over all the industry continues to do quite well, continues to do quite well. i have just five minutes left. i'm going to get to the china 301 as well. and again, this is a case where just like no one disputes there is steel overcapacity in the united states. no one disputes there are property violations taking place in china. and the ustr published again another lengthy report.

the details, the economic damage that has taken place in u.s. firms and businesses because of china's violation of persistent violation of the intellectual property, piracy, technology transfer and other anti- competitive practices. so it is -- these industries are very important. time and again, the united states and china have made a grievance to try prod china forward to a more market-based and more rules compliant formulation. china time and again has failed to meet its commitment. so at some point in time, do you let the cheating continue or do you do something about it? will the tariff work? -- tariffs work? i don't know. i don't know if they will work or not buts the clear the united states is winning this trade war. downuan in china has gone down in value. investors are not betting on china anymore. china has been pushing back

publicly on this. there is strong evidence that suggests they can't long endure a trade war. they are much more export exposed than the united states is. we have a $19 trillion economy. we export about $130 billion worth of good the china every year. china's economy on the other hand is really export dependent. it is not driven on internal consumption. if china uses access to the u.s. market, it is going to feel a lot of pain. so the leaders in beijing have a really important decision to make coming up. do they let their currency drop further in value, which is going to drive investment out of china, which is a bad thing for them? do they troy to prop up their currency which would exhaust their foreign reserves which are well over $1 trillion, but they will come down in a hurry or do they make the reforms they have

been promising to make for the last 18 years? that is certainly what i hope the outcome is there. and so you have seen this kind of escalation between the u.s. and china. i'll be happy to get to a little f that in the q & a. but you can see the specific demands that the u.s. government made of china about what they expect to do. they want the trade deficit reduced. they want to end predatory intellectual property practices. china has a program called made in china 2025. any country can be allowed to do economic planning but if that was exclusionary and discriminates against foreign firms it is right for us to have a problem with it and that is where we are with made in china in 2025. remove investment restrictions, lower tariff bubbles, nontariff barriers are higher in china

than they are a in the united states. and drop some of their w.t.o. cases against china for these i.p. actions that we have taken. this is just a time liverpb this. i will be happy to talk about any of these issues in the q & a as well because there is a lot of other things going on, the trade enforcement front, but just to widen the lens before i get to questions. trade enforcement is rare in the modern context. that is in part because the last foured a my opinion strations haven't done a lot of pit. -- of it. but if there is a -- and the trade reporters may refer to this as well. the u.s. trade policy is like a three-legged stool. one is built on trade expansion. trying to open markets overseas. one is built on making adjustments for workers impacted by trade. you may have heard of a program

called trade adjustment assistance. if a worker loses hor job because a factory moves verseas, there is planning training provided. and the third one is trade expansion. when you hear bob corker, for instance, i'm sorry i'm going to pick on him but i just a&p am. i hate these actions from the trump administration. the trulte is he has never supported any trade enforcement action ever. is working with the network and others that want to gut u.s. trade laws. it is as simple as that. there is a little bit of disingenuous rhetoric that goes on in the congress about this. there is a lot congress could have done to stand up for china. they never did. that's what the trump administration is trying to do. i'm going to stop there. and turn it back over to chris

and all of you for your questions and i thank you again for your attention. i'll look forward to hearing rom you. >> you mentioned how the results of this, some countries moved to quotas on steel rather than the tariffs themselves. talking to folks who rely on imports, they said the quotas maybe end up being more harmful to them than the tariffs, understanding it depends on which side of the equation you're looking at. could you talk about how quotas compare to tariffs in terms of their effect on the market? >> i strongly prefer tariffs to quotas. for two reasons. tariffs you're generating rever knew that you can use for things like paying for the aid to farmers that are being impacted

by retaliation. that is revenues that are coming into the treasury. the other thing is that you're not necessarily restricting supply through tariffs. you may be adjusting where the supply comes from a little bit but you're not necessarily restricting supply. so again, i think for some firms, if they are using steel that is simply not made in the united states, they can get an exemption for that. but if the steel is made in the united states, it is possible that they can have supply issues until more domestic supply comes online. i will say again, i vastly prefer the tariff approach to the quota approach. that is a good question. >> i have two questions. one is how do you think the trade will -- and the second is what about a w. tombings.

you mentioned in the past 18 years china actually failed to keep its promise. if the same w.t.o. doesn't work that well in terms of china keeping its promise. what can we do about this and what u.s. can do about the w.t.o.? >> good questions. first with respect to the u.s.-china dispute. i don't know where it is headed. i gave you kind of the three possible decisions that beijing will have to make. do they prop up their currency exhausting foreign reserves? do they let the yuan continues to slide which is going to drive out investment in china or do they make reforms that are painful? they are particularly painful because these state-owned enterprises don't respond to markets and they need to. and there is a lot of economic reformers inside china that have been trying to drive it in this direction for a long time. at the end of this process, if

we get a freer and fairer type of trade with china, everybody will benefit from that. but the ball is firmly in beijing's court. i cannot predict with exin ping -- jinping is going to do on this. these are decisions that should have been made a long time ago. with respect to the w.t.o., i firmly believe china has wrecked the w.t.o. if you have an economy that size and that scale that is coming into the world trade organization, it is expected to be compliant with the rules. that is one of the expectations. it simply hasn't been. the idea, i was around for this debate back in the 000. if we bring china into the w.t.o., it will change its rules and it will adhere to them and become more market-based and demock ties and all of these things will has been. none of that has happened. none of that is true.

china has stuck to its economic planning and state-owned interprice because it is easier for it to do that. it is hard to wean yourself off of that type of an economy that is that the market-based. the it is a terribly >> that its leadership has been postponing that pain. i will be candid, for the wto to work well, china must be out of the wto. it gives members more options to go after them to quarantined their affect. nottrump administration did read the wto, china did. you mentioned prices were depressed for steel because of china's production. i'm wrong, but i thought general prices for steel have been up because of china's

purchase of scrap steel. but is it for different prices? >> the answer is that it depends. still is a commodity and it fluctuates wildly with business cycles. so, when the economy was really heated in the mid to thousands, the price of steel was way up. hit, therecession price of steel came down. when it started to ramp back up, the price of steel went up. three years ago, prices in the united states hit rock-bottom, because there was record production worldwide. china was in a slowdown, but did not stop making the steel. and this is what happens. you have seen the price of steel go up and complaints about that. but if you look at steel futures, they are coming back down.

but if any steel consumer thinks they will get the prices they are not. those are recession level prices. they are not happening in any sort of market reality. it seems too good to be true, it usually is. and that is what happened. steel consumers have an adjustment to make to pay a more market-based rate for steel. i am from the pittsburgh gazette, i have an interest in steel, as you might imagine. i wanted to ask more about the national security justification. you had mentioned some of the uses the military has for steel. but secretary mattis has said that only 3% of the steel is imported. so i am wondering if that is enough to justify national security concerns.

>> through a narrow scope. you can say it doesn't matter. to the premise of this, which is important. likeu are looking at it as , can i get the steel i need for my defense, the obvious answer is yes. but when you look at the health of the steel industry more broadly, the answer is that it is very much in jeopardy. and that is the rationale for the 232 case. that without a functioning the plants which make these aircraft were submarines, they will not be around. and then we will be dependent on a foreign supplier for our national the -- defense. to say that able about some things, but again,

steel and aluminum are the base materials for every defense platform that we have. a lot of people like to talk about digital warfare, and sure, it may evolve. stille fact is that we get our troops around, we still protect them, and our country, with steel. it is a vital part of our defense industrial base. and there is no question it is in jeopardy. , when the last iraq war we were building a massive number of armored personnel carriers, we read it to a shortage of armor plate steel. steel mill was in the united states, it stopped commercial orders and made them for the defense department right then and there because they wanted to, and by law, they had to. there is no steel mill anywhere else in the world where the u.s. government can say you are going to make armor plates for us.

it will ultimately be a choice. in the unitedmill states, they do not have a choice under the law. and so, it is the threat to the viable commercial market keeping those mills in business. you saw a number of blast furnaces that have closed, that is a phenomenal lawson steelmaking capacity. we have reached the peak of our steelmaking in 1974. and we are the most import exposed. it is 30% of our steel is supplied from overseas. which is the highest of any industrialized country that makes steel in the world. we are particularly vulnerable. >> can i follow up? >> please. >> is there any particular timeliness? this should have been dietary the obama administration, but

they would not do it. we talked to them. the timeliness was coming out of this last debt in steel, which began about four years ago. you had more mails that were going out of business. that is when a shut down in illinois. lowprice of steel was so that the steel mills could not make capital investments. and could not make steel get paid for more than the cost of making it. you cannot operate any kind of business like that. so what they did, and i explained this, as they applied battlefield medicine with the duties. and they put a bandage on it. but there was still an underlying wound. the 232 is to try to get the

patient better. said, theretary ross goal, ultimately, is to root out the global overcapacity, and also to get the market conditions such that u.s. mills can operate at at least 80% of capacity. traditionally, they have built well into the 80's and their capacity, but lately, it has been in the low to mid 70's. and if they are operating at that, they can pay workers, suppliers, but cannot do the things they need to do to be competitive. concern.should be a scott, is there any mechanism for removing the wto member from the wto, whether it be china or anybody else? >> it would become located, no

question about it. complicated, no question about it. a country would have to willingly step back. there are a lot of consequences. but what i am stating is kind of a reality. which is you have a square pay in a round hole with china. every country in the world could spend all day filing disputes to be heard by panels on all of the unfair trade practices. it would literally clog up the system and countries have justeld from doing that because they do not review the results as being satisfactory. it takes too long, china will find another way. you see another kind of thing. of thehnical details wto, i cannot tell you the

precise mechanism under which every country could take another one out. i cannot even know if that type of mechanism exists. when i was expressing is just the reality. that it does not function well with china in it. i am a u.s. correspondent for media in the netherlands. to what extent, if you argue the national security clause, what extent does it matter which countries are affected and whether they are allied states, say nato or anything else. the difficultause thing that we in netherlands and europe are getting our heads that you are field exporting to us and is part of a national security threat that seems to square difficultly with the idea that you are military allies. how does that fit together? >> good question.

if the problem is global overcapacity in steel, and by definition, the problem is the volume of steel, and where it comes from makes some difference , but because we have these duties in order against china, china is the number 11 importer of steel into the united states. but that does not mean that china and steel does not have an impact on the u.s. or the european steelmaker is, quite honestly. because it gets shipped through countries like thailand, malaysia, vietnam. this is documented in the section 232 report and through other evidence. of then it causes a series anti-competitive practices that other governments take as well. there is a viral effect to this

overcapacity. i think europe is part of the solution on this. and something the eu did recently, which i'm very supportive of, is to put a safeguard on steel imports, primarily coming from china. the fear was that steel headed to the united states would now be headed to the eu, unless the eu also raised barriers. ultimately, what we need is a quarantine against this excess capacity coming out of china. i think the talk that president juncker wasth mr. encouraging and positive. but i also feel it will take some sort of negotiated settlement. in order to get the tariffs off of european steel. i agree that when you look at a time of steel coming from the netherlands, is that in itself a threat, it is not.

but more broadly, it is the volume of steel that exists in the world. so europe needs to look, doesn't have the right amount of capacity, is it making enough for its own markets? every country needs to do this. until we have a broader solution, i think that is the approach the demonstration has that it is notee europe where the anti-competitive practices come from. the gross violations in anticompetitive practices. and europe is not a strategic competitor. but that is not necessarily what this is about. this is about the volume of steel that exists in the world today. and what is each region's responsibility to lower that volume of steel, to bring it back down.

>> any other questions out there? what are the stories out there for journalists to do? the big headline stories about steel and aluminum have been covered quite a bit. but are their upcoming aspects of this process that are good inflection points for coverage? or other niche stories out there? >> good question. there have been a lot of stories about firms that might be facing impacts from steel and aluminum. michigan, which is heavily steel consuming state, particularly in the audio and aerospace vectors. when i was speaking to the small and midsized business owners, there was one concerned about

the length of the tariffs, and what ultimately was going to happen. but they were mostly focus on other things. they were focused on finding skilled workers in an area that has been depopulated. how i keep up with innovation. and the tariffs were not nearly as big of a concern as sometimes they are made out to be. but there are great stories and steel. easy toay that it is contextualize this as nostalgia, bringing steel mills or cold that. and yet, we do not want a 1950's american economy. that is not what this is about. also possible to see the steel industry to get back to where it should be. and we are seeing some of that occurring. if you go to granite city, for example, the steel mill is open. what does that mean for the community?

that means their schools, their property tax base just went up. because there are 800 workers making a living wage sure not before. they are going to have better schools for their kids, the restaurant owners are going to have better business. so what this does to the community is pretty exceptional. and you are seeing stories like this not only in granite city, but in other mills as well. i think the other thing that is , and i haveto me spoken to soybean farmers, steel consumers, and there are a whole lot of people willing to give the president the benefit of the doubt on this. these conversations are long overdue. steel overcapacity has been around for a decade.

intellectual property theft has been around for two decades. there has been a lot of talk about it, but folks haven't done anything. so what are the opportunities out there for businesses if there truly is a free and fair marketplace? those are some of the things i think are worth considering. tariffs,ect to the 232 at some point the wto will make a decision. said thetries have united states cannot do that, and the united states said you cannot retaliate. so that will be a critical inflection point if and when those decisions get made. the other thing is how does beijing respond. its currency is dropping, that is a big problem. and it is reckoning time. >> james and then stewart.

>> just to follow up. you. guys put out something recently sang factory jobs increased since tariffs went into effect. how much of that is coming out of the metals industry itself? are you seeing from those manufacturers that have benefited, what is their reaction to the tariffs and how is that managing? >> good question. , and you can ride steel consumers facing adjustment issues, but when you look at the data, and this is the important thing, when you look at the data, there are a couple of dirty truths. is that the united states is somewhat, but not very, trade exposed. we are the largest consumption economy in the world. we consume a lot.

these tariffs made, again, impact some businesses. when you look at the macro picture, it is very good. and in the four months the tariffs have been in effect, manufacturing growth has outpaced growth in the rest of the private sector. you,ot taking on any of but if i read some headlines about the apocalyptic trade were in the stuff that is happening, you would not find that happened. when you go out to industrial parks, they are still making their product and selling it. their problems are skilled workers who can pass a drug test. where will i get my next generation of innovation. how will i keep up? tariffs are a tiny part of most of their concerns. same for soybean farmers. when you look at futures, they are going up. they are worried about the weather. somebody will buy beans,

ultimately. so our overall economy has a lot of strength behind it. we may be towards the end of the cycle, but we are not there yet. but will sustain a love growth. -- a lot of growth. i have always said there is never a better time to wage a trade war. i said this tongue-in-cheek, but it is still true. whererate in an economy the corporate sector just got a $1.4 trillion tax big -- break. lowave exceptionally unemployment in an economy that is not as straight exposed. you couldn't wargame a better scenario that this. so we are well positioned to succeed. >> those jobs gained, is most that in metals? >> a lot was in transportation equipment.

manufacturing jobs, nationwide, our between 12.5 and 13 million. in that sphere, about a hundred 37,000 jobs. metals is never going to be the primary job provider. but interestingly, fabricated metals, they added 5000 jobs in july. if you read the stories, it is like there is an apocalypse. but if you look at the data, they are adding jobs. after the break, stewart gets first crack. we're going into lunch right now. it is 12:50 p.m.. we have lunch for 30 minutes, and our next session will start at 1:20 p.m.. >> thank you. [applause] lunch is out there for you.

>> c-span's washington journal, live every day with policy issues that impact you. coming up, stars and stripes top issuesscusses facing the new veterans affairs secretary. and that david wasserman talked about his outlook for the upcoming midterms. be sure to watch c-span's washington journal at seven eastern this morning. join the discussion. nominated to the supreme court by ronald reagan in 1987, justice anthony kennedy is retiring after 30 years of the match.

monday, we take a look at his legacy and its impact on the nation. with a clerk for justice kennedy .rom 2011-2012 and former assistant to the solicitor general, who argued 29 cases before justice kennedy and the court. watch the legacy of supreme court justice anthony kennedy monday night at 8 p.m. eastern c-span.org, or listen .n the free radio app >> next, remarks by new jersey senator cory booker. annual event brings together activists and grassroots organizers from around the country to highlight issues important to the progressive agenda. senator booker is followed by new york gubernatorial candidate cynthia nixon and senators elizabeth warren and kamala harris. [applause]